Prime Minister John Key has added to rumours of a leadership coup in the Labour Party, saying leader David Shearer is in "a lot of trouble".

Last night TV3 reported that an unnamed Labour MP had said Shearer had been effectively put on notice, with two months to improve the performance in the polls.

It came after a poll released this week saw Labour's support slump to just over 30 per cent, a similar picture to the Fairfax-Ipsos poll last month.

Today Key told RadioSport Shearer was under pressure with Labour likely to struggle to a win in tomorrow's Ikaroa-Rawhiti by-election.

"He's in a lot of trouble," Key said.

"They've got the Ikaroa-Rawhiti by-election in the weekend. I actually don't think Labour's going to do very well.

"They might win it but they used to win it by 6500 votes, but at best they'll scrape home, so I think he's in a fair bit of trouble myself.

"I don't think he's actually gone today or tomorrow, but I think he's under a lot of trouble."

Key claimed he had predicted that the Australian Labor party would dump Julia Gillard in favour of Kevin Rudd.

"In the end one of the big things politicians always have is self-preservation, and I think it's no more complicated that the members of the Labor Party in Australia think they've got a better chance under Rudd than they did under Gillard," Key said.

He declined to say who he preferred of the two.

Yesterday Shearer dismissed the talk of a leadership battle.

"There is going to be me leading Labour into the election in 2014," he said.

"I can absolutely and utterly assure you of that. It's a very united caucus."

This morning iPredict, the forecasting website owned by Victoria University of Wellington, pointed to a 40 per cent chance that Shearer would depart as Labour leader in 2013, with the possibility climbing in recent weeks.